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A Good Problem to Have

With my sister-n-law finally moving out of my in-laws house we are now able to sell it.

My wife’s parents passed away in 2008 and we inherited a paid off house in a nearby town. It has taken awhile(years and years) for my sister-n-law to be ready emotionally and financially to get a place of her own. Our good friends are actually buying the house because they need the bigger space and I do not want to work to get the house into ‘showing shape‘. We are glad we can help out friends and they are getting a pretty good deal.

Can you guess which real estate it is?

Crappy house

Bad House

I’m selling if you’re buying

All said and done we will clear $132,000. What to do next is the dilemma. For various reason spelled out in earlier post, we will not be giving half to my sister-n-law, we will be paying her a lifetime annuity month to month. So I get the whole lump sum to play with.

The way I see it forming up, I have 4 options;

Increase my passive income through rental properties. I could easily buy a duplex with this money and see a positive cash flow (call it $700/month) from here on out. This would provide a stream of money coming in while building equity and it fills a glaring gap in my income diversity(real estate).

Increase my passive income through continued dividend investment. I already have a healthy portfolio, but $135k can easily translate to almost $400/month with very little downside.

Decrease my debt load. My wife and I still owe about $90k in student loans and have a HELOC balance of about another $25k. This house windfall could ZERO out those balances saving $380/month in interest.

I could SALT a lot of different accounts. I would take the money, pay off maybe one outstanding loan, beef up the cash holdings, invest a good chunk in the markets, finally get the kitchen updated, and still sit back with a sizable amount waiting for the next good opportunity.

This article was not written just to create a new post. Although I admit I am the guy who when making a list, adds things to the list I have already done so that I can scratch some things off right out of the gate.(I’m List Happy). I have truly been somewhat frozen about making this decision. I can see the merit in all 4 paths and have made no progress is eliminating any of them.

Your thoughts on the matter would greatly be appreciated.

UPDATE 04/10/2017 – We CLOSED on the House, HERE is what we have done with the Money so far….

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11 thoughts on “A Good Problem to Have”

With your current sizeable dividend account I would personally pay off those student loans. Option 2. Get that done and gone all the while updating the kitchen. And investing the rest of the 20k in stocks

As I hate debt, I would kill debt as soon as possible.
When the student repayment loan has a return almost the same as building up dividend income, then in my books, the money would go to the student loans. The cashflow from this can then be reinvested every month.